Starbucks Company Evaluation
BA 530
Employee Retention and Company Success
Starbucks believes that the compensation paid to executive officers should be closely aligned with the performance of the company on both a short-term and a long-term basis, and that such compensation will assist the company in attracting and retaining key executives, which is critical to long-term success. Thus, compensation for executive officers consists of three components: annual base salary, annual incentive bonus, and long-term incentive compensation. Annual base salaries for executive officers are reviewed annually or at the time of promotion or other change in responsibilities. Initial salary and increases in salary are based on evaluation of such factors as the level of responsibility, individual performance, level of pay both of the executive in question and other similarly situated executives, and a comparator group companies’ pay levels. The annual incentive bonus for executive officers, except for the Chief Executive Officer and Chairman, is dependent on both company performance and individual performance during the prior fiscal year. Once objective performance measure or measures, bonus target percentages and other terms and conditions of awards are determined by the Committee, target bonus amounts are then expressed as a percentage of base salary and are established according to the overall intended competitive position and competitive survey data for comparable positions in comparator group companies. After the end of the fiscal year, the Committee determines the extent to which the performance goals were achieved, and approved and recommended the amount of the award to be paid to each participant. The total bonus award is determined according to the level of achievement of both the objective performance and individual performance goals. The Chief Executive Officer and Chairman’s incentive is based 100% on company performance. Long-term incentive compensation for
Employee Retention and Company Success
Starbucks believes that the compensation paid to executive officers should be closely aligned with the performance of the company on both a short-term and a long-term basis, and that such compensation will assist the company in attracting and retaining key executives, which is critical to long-term success. Thus, compensation for executive officers consists of three components: annual base salary, annual incentive bonus, and long-term incentive compensation. Annual base salaries for executive officers are reviewed annually or at the time of promotion or other change in responsibilities. Initial salary and increases in salary are based on evaluation of such factors as the level of responsibility, individual performance, level of pay both of the executive in question and other similarly situated executives, and a comparator group companies’ pay levels. The annual incentive bonus for executive officers, except for the Chief Executive Officer and Chairman, is dependent on both company performance and individual performance during the prior fiscal year. Once objective performance measure or measures, bonus target percentages and other terms and conditions of awards are determined by the Committee, target bonus amounts are then expressed as a percentage of base salary and are established according to the overall intended competitive position and competitive survey data for comparable positions in comparator group companies. After the end of the fiscal year, the Committee determines the extent to which the performance goals were achieved, and approved and recommended the amount of the award to be paid to each participant. The total bonus award is determined according to the level of achievement of both the objective performance and individual performance goals. The Chief Executive Officer and Chairman’s incentive is based 100% on company performance. Long-term incentive compensation for
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